We live in an era where developments in computing and automation are posed to rapidly disrupt the economy and the distribution of wealth. These economic systems that got us this far will no longer be beneficial or even viable in this new world. Allowing this inequality to happen will have detrimental effects on economic growth and social stability in general.
One of the core principles of our economic system is the division of labor. When someone creates incredible value, it is usually because they are on the cutting edge of a particular instance while being competent in others.
Businesses have a lot of externalities, or costs which are not properly attributed and accounted for. These are things that are very negligible in small scales, but are also widespread. Some
We want economics that creates positive action to occur in the economy and to make it increasingly common. There are many different factors that come into play for a each success to happen, however when value is generated, it doesn’t always go back into the things that created them.
Payment goes to systems that created the success, not just the individuals, but the systems that enabled that person. These successes can be tallied through large scale factor analysis.
This is so that we can enhance the systems that create the environments that enable success. Unfortunately, individuals do very poorly at properly attributing their successes towards the factors that really enabled them, or if they do, they aren’t the best stewards of those goals. If we only give individuals capital, then how will common infrastructure be built. Individuals benefit exponentially by the rise in collaboration that it brings, yet no individual would fund it out of their own pockets. Right now we have taxation and government which is also a partial solution.
With factor analysis, if education is a contributing factor, we reinvest some of the returns produced by the individual towards expanding education and also investing in the causes advanced by other well educated individuals. We will find that things like food, shelter, and safety are common factors necessary in all successful people, therefore those programs should be continuously expanded to all. That’s not all though, because only with those we may not see success. People may become indulge in gluttony and sloth. We have to also expand the other factors. Healthy competition, well calibrated status rankings.
We are also capped by the minimum income that we want to provide people. Basic income is a partial solution, but not fully flushed out. This is the proper solution.
How do we implement this? Is there enough data for true factor analysis? How do we properly coordinate governance for this?
Many systems are externalities in the economic system, but are crucial factors in the continuation of life. These externalities, such as environmental costs need to be factored into the profits derived from it. Deforestation must take into account the amount of damage it will subsequently cost. This is limited by the our ability to correctly interpret and evaluate the consequences on a large scale in order to determine the per unit cost of an action.
We can advance this through simulation processes. We have to catalogue all known knowledge and utilize that to predict likely outcomes. When there are large areas of uncertainty, we need to invest in experiments to reduce the uncertainty or decompose the model into smaller components which have more deterministic causalities.
There’s a problem with incentivizing individuals versus long term inequality. For individuals and groups, we want them to engage in long term activities which provide much higher returns.